What S. 2155 means for credit union compliance
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S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, was signed into law May 24, 2018. Regulatory burden costs the nation’s 5,800 credit unions a total of $6.1 billion annually – a total that translates to $115 per member household. 
 
In North Carolina, regulatory burden costs the state’s 72 credit unions a total of $238 million annually. In South Carolina, regulatory burden costs the state’s 65 credit unions a total of $67 million annually. This bill contains several provisions that will reduce that regulatory burden, including:

  • Establishes a safe harbor from certain requirements for a loan to be considered a Qualified Mortgage;
  • Rescinds the additional data points required under the Home Mortgage Disclosure Act for insured credit unions that originate fewer than 500 closed-end and/or 500 open-end lines of credit;
  • Reclassifies one-to-four unit, non-owner occupied residential loans as real estate loans, so the loan would not count against the member business lending cap;
  • Clarifies that the same consumer protections in place with respect to mortgage lending are nonexistent for Property Assessed Clean Energy loans;
  • Removes the three-day wait period required for the combined TRID mortgage disclosure if a creditor extends to a consumer a second offer of credit with a lower annual percentage rate;
  • Requires NCUA to make publicly available a draft of their proposed budget, hold a hearing with public notice during which this draft would be discussed and solicit and consider public comment about the draft budget;
  • Provides a safe harbor for properly trained financial employees who report alleged elder financial abuse; and
  • Requires the U.S. Department of Treasury to conduct a study on the risks that cyber threats may pose to financial institutions.

View the full bill here.

 

Impact on South Carolina

Section 101 - provides relief from some of the requirements of the Qualified Mortgage rule for certain lenders who hold mortgage loans in portfolio.

Section 104
- includes changes to Home Mortgage Disclosure Act reporting requirements, including raising the threshold for reporting to 500 closed-end and open-end loans in a calendar year.

Section 105
- presents a simple fix, based on consistency and fairness that could significantly reduce constraints and free up billions in capital for economic development. Under current law, when a bank makes a loan for the purchase of a 1-4 unit, non-owner-occupied residential property the loan is classified as a residential real estate loan. On the other hand, credit unions that make such loans are forced to classify such loans as business loans.

Section 108
- addresses long-held concerns about Property Assessed Clean Energy (PACE) loans; namely, that the same consumer protections in place with respect to mortgage lending are nonexistent for PACE loans.

Section 110
- removes the three-day wait period required for the combined TILA/RESPA mortgage disclosure if a creditor extends to a consumer a second offer of credit with a lower annual percentage rate.

Section 303
- is an important step toward improving protection for seniors by providing legal immunity for properly trained financial services employees who disclose concerns about financial exploitation of senior citizens.

Section 501
- requires Treasury to conduct a study on the risks that cyber threats may pose to financial institutions. This is particularly important due to recent data breaches, which cause tremendous disruption and impose significant costs to credit unions.

Impact on North Carolina

Section 101 - provides relief from some of the requirements of the Qualified Mortgage rule for certain lenders who hold mortgage loans in portfolio.

Section 104
- includes changes to Home Mortgage Disclosure Act reporting requirements, including raising the threshold for reporting to 500 closed-end and open-end loans in a calendar year.

Section 105
- presents a simple fix, based on consistency and fairness that could significantly reduce constraints and free up billions in capital for economic development. Under current law, when a bank makes a loan for the purchase of a 1-4 unit, non-owner-occupied residential property the loan is classified as a residential real estate loan. On the other hand, credit unions that make such loans are forced to classify such loans as business loans.

Section 108
- addresses long-held concerns about Property Assessed Clean Energy (PACE) loans; namely, that the same consumer protections in place with respect to mortgage lending are nonexistent for PACE loans.

Section 110
- removes the three-day wait period required for the combined TILA/RESPA mortgage disclosure if a creditor extends to a consumer a second offer of credit with a lower annual percentage rate.

Section 303
- is an important step toward improving protection for seniors by providing legal immunity for properly trained financial services employees who disclose concerns about financial exploitation of senior citizens.

Section 501
- requires Treasury to conduct a study on the risks that cyber threats may pose to financial institutions. This is particularly important due to recent data breaches, which cause tremendous disruption and impose significant costs to credit unions.


Additional Resources

Section by section outline of S. 2155

Summary chart of S. 2155

Impact of S. 2155 by State (CUNA)

Frequently Asked Questions About the Impact of S. 2155 on Credit Unions (NCUA)

S. 2155 effects on member ID program (CUNA Compliance)

S. 2155 changes to HMDA reporting (CUNA Compliance)

FCRA changes under S. 2155 (CUNA Compliance)

 

Regarding financial institutions with assets at or greater than $100 billion, see the following and please note that outside of the items presented above, it is not possible to compile a list of how this applies to each asset class at this time. The bill specifically speaks to large financial institutions and to institutions as a whole.

TITLE IV--TAILORING REGULATIONS FOR CERTAIN BANK HOLDING COMPANIES
(Sec. 401) The bill amends the Financial Stability Act of 2010, with respect to nonbank financial companies supervised by the FRB and certain bank holding companies, to:

  • increase the asset threshold at which certain enhanced prudential standards shall apply, from $50 billion to $250 billion, while allowing the FRB discretion in determining whether a financial institution with assets equal or greater than $100 billion must be subject to such standards;
  • increase the asset threshold at which company-run stress tests are required, from $10 billion to $250 billion; and
  • increase the asset threshold for mandatory risk committees, from $10 billion to $50 billion.

 

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Columbia, SC 29202

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